The 5 Stages of Financial Life

As we go through life we are not only on a personal journey, but a financial journey as well. Throughout the different stages of our lives, we experience different financial situations that require us to assess where we are and the progress that we have made. This allows us to feel confident that we have made the correct decisions regarding our wealth for our life at that given time. What stage are you in, and are you on track to reach your financial goals?

Stage 1 – Young Adulthood

This is one of the most exciting stages; you have your first real job out of college and are enjoying getting regular paychecks. It’s true independence! Most likely there is a residual amount left in your bank account after bills are paid. So what should you do with it? Financial planning is easy to put off, but the successful money habits you start now will pay huge dividends later in your journey. Taking time to save now and invest in your future is something you will not regret.

Stage 2 – Middle Adulthood

This is by far the busiest stage of your life. With potentially a young family, a mortgage and all the activities during this stage, there can often appear to be more demands on your money than you have available to spread around. You are secure in your job, but what about life and disability insurance or retirement planning? This is the time to start that retirement nest egg.

Stage 3 – Peak Earning Years

This is the time when you can and should be maximizing your investments. As your children have grown up and are on their own, now is the time to focus on achieving your own financial independence. Paying off debts and being strategic about your investments is crucial in this stage. It is also a great time to get your estate in order.

Stage 4 – Financial Independence

At this stage you can experience the four freedoms, which are the freedom of time, money, relationship and purpose. You can choose to work if you want to, not because you have to. This is the time when you should plan where your cash flow will come from so you can enjoy everything you have worked so hard to achieve.

Stage 5 – Later in Life

At this stage of your life, you have done almost everything you have ever wanted to do. It is now time to look at options for your future living and health arrangements and be intentional about how you wish to transfer your wealth of knowledge, wisdom, experience and assets to your heirs and other beneficiaries.

As you can see, each stage has milestones that can help you determine where you are on your financial journey and what to do next. If you want more information or specific steps you can take within each stage, contact FirstWave Financial™ to speak with one of their WealthCoaches™. They will be happy to provide a complimentary consultation to help you know if you are on track to achieve your financial goals.

FirstWave Financial™ is a registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request.